Singapore to impose SAF levy on departing flights

The Singapore government is to impose a levy on all flights departing the country to support the use of SAF, with the use of sustainable aviation fuel mandated from 2026, notes the Civil Aviation Authority of Singapore (CAAS). Proposals aim to commence SAF usage at 1%, rising to between 3-5% by 2030, ‘subject to global developments and the wider availability and adoption of SAF’. ‘As the market for the supply of SAF is still nascent and the price of SAF can be volatile, we will adopt a fixed cost envelope to provide cost certainty to airlines and travellers’ notes the CAAS, with the levy to be set at a fixed amount based on the SAF target and projected SAF price at that point in time. Proceeds collected through the levy will then be used to purchase SAF, with volumes uplifted adjusted based on the pre-determined SAF levy and prevailing SAF price. The levy will vary based on factors such as distance travelled and class of travel, with premium-class passengers contributing more. CAAS estimates that the levy to support a 1% SAF uplift could increase ticket prices for an economy class passenger on a direct flight from Singapore to Bangkok, Tokyo and London by around S$3, S$6 and S$16 ($2.23, $4.5 and £12) respectively. The initiative was announced as part of the Singapore Sustainable Air Hub Blueprint, launched by minister for transport and second minister for finance Chee Hong Tat at the Changi Aviation Summit and developed by the CAAS in collaboration with industry and other stakeholders. Other measures to promote sustainability will include five initiatives to reduce energy use and deploy renewables at airports and optimising ATM operations to improve efficiency. The minister described the Singapore Sustainable Air Hub Blueprint as a “balanced approach” intended to “help to catalyse the development of sustainable aviation in the region and around the world”.